Renewable energy: offshore wind power may attract future investments to Brazil

The offshore wind power market, which produces electricity from the movement of fixed or floating turbines on the high seas, may attract investors in the medium and long term to Brazil. A 2019 study produced by the Energy Sector Management Assistance Program (ESMAP) identifies Brazil as one of the countries with the greatest potential for offshore wind power generation.

The first moves by companies to implement the technology have already been happening with the search for environmental licensing for the approval of their business in the country. According to Nilton Mattos, partner specialized in Infrastructure and Energy, major players in the Oil and Gas sector are glimpsing opportunities in the offshore wind power segment. “Today, in Brazil, we already have around nine projects for the sector in licensing”, says the partner.

Although the offshore wind power market is not as consolidated as other energy sources, such as Oil and Gas, the expert considers that the climate characteristics of the coastal region of Brazil can boost investments.

“With the licensing requests, we identified three main areas: the northeast region as a whole, mainly the state of Ceará, and the states of Rio de Janeiro and Rio Grande do Sul,” adds Mattos.

The partner also points out that the infrastructures of Gas and Oil that already exist in the seas of these states increase the potential of the regions. “There are platforms and other offshore structures that can serve as support for the offshore wind market ventures, reducing the costs of the installations, which are still quite expensive”.

Currently, Bill 11247/2018 is in progress in the House of Representatives, which aims to promote the development of electricity generation from a wind source located at sea. But, according to the expert, the progression of the Bill is not strictly necessary for the development of the offshore wind market in the country. “There are regulations from Aneel, Ibama, and the Navy that already provide for some type of offshore construction and sale of wind energy. By adjusting the infra-legal regulation, projects can happen”, explains Nilton Mattos.

Experience of the European market

According to the 2018 Global Wind Energy Council report, the world’s offshore wind market had already accumulated a power generation capacity of 23 GW (gigawatts). Europe is still responsible for the largest offshore wind farms, mainly because of the markets in the UK and Germany, which together account for 62% of the world’s offshore wind power generation.

Partner Rodrigo Ferreira Figueiredo, of Corporate/M&A and responsible for our London office, explains that most of the industry players that provide the necessary infrastructure for offshore wind farms are concentrated in Europe. “The leaders of this industry are European and many of them already invest in the Brazilian onshore wind farm market”.

Figueiredo points out that the main players in the wind industry, or even other forms of energy, tend to have a good appetite for investment in the country, especially those who already know the Brazilian market and the peculiarities of the country. Other groups that still do not have a presence in Brazil have also shown interest (although they tend to take more time to understand the country and its peculiarities).

Despite the feeling of caution of foreign investors, in the expert’s evaluation, sustainable businesses are the most attractive. “Renewable energy, in general, is one of the great engines of European investment in Brazil. It is an area that has been gathering a lot of interest from players in recent years,” he considers.

The offshore wind market represents a great opportunity for the promotion of sustainable initiatives, on the rise in the current business models. Renewable energy sources can also be another alternative for Brazil to reach the goals determined in the Paris Agreement, in which there is a commitment to increase, in its energy matrix, the participation of sustainable bioenergy by approximately 18% by 2030.